Boosted by weak dollar after Fed cautious signals about further rate hikes, the euro was headed for its biggest weekly rise in more than four months.
The euro has been stuck in a $1.12-$1.15 range for the last three months due to growth fears. Further, signs that the European Central Bank is unlikely to end its stimulus soon weighed on euro laziness.
However, dovish Fed minutes this week have triggered dollar-selling, lifting the euro as high as $1.1581.
The single currency has gained 1.2 percent this week.
Despite its recent gains the euro has been pressured by weaker-than-expected economic data, especially from France and Germany.
In addition, the ECB is widely expected to remain accommodative in 2019. This traders say should prevent the currency from breaking much higher.
Another reason for euro strength could be a resurgence this week in the offshore Chinese yuan.
START TRADINGForex – Commodities – Biggest weekly rise for euro since September
China and the United States have extended trade talks in Beijing, boosting oil prices and broader sentiment.
Currencies such as the Australian and the New Zealand dollar are likely to see further gains if a U.S.-Sino trade deal is reached.
The dollar index on Friday fell by 0.3% to 95.195. The index has fallen around 3% since mid-December on expectations that a growth slowdown will restrict the Fed from raising rates. In 2018, the greenback outperformed its peers, gaining 4.3% as the Fed hiked rates four times.
The sterling traded up 0.6% at $1.2823. A media report cited cabinet ministers as saying Britain could seek to delay its scheduled Brexit date. The vote is now due to take place on January 15.
Oil prices fell nearly 2% on Friday but were on track for weekly gains. Financial markets strengthened on hopes the United States and China may soon resolve their trade dispute. WTI and Brent are set for their second week of gains, rising nearly 8% and 6% respectively.
International Brent crude futures LCOc1 were at $60.55 per barrel at 1440 GMT, down $1.13, or 1.83%. U.S. West Texas Intermediate (WTI) crude futures CLc1 fell 87 cents to $51.72 per barrel.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.